Are there any transitional welfare measures for companies to alleviate the impact of COVID-19?

By means of Decree No. 29/2021, of 12 May, the Government has approved measures granting pardons of fines and reduction of default interest to taxpayers for late payment of the contributions to the Compulsory Social Security System.

These measures apply to all employers and self-employed workers with debts relating to contributions, fines and interest. To benefit from such measures, these entities must submit an application to the National Institute of Social Security. This decree expressly foresees that these measures apply to entities that:

  • for whatever reason, have never been registered in the Compulsory Social Security System (and, to benefit from these measures, they must previously be duly registered);
  • have judicial proceedings pending for the enforced collection of the contributions in debt, in courts, public prosecutors' offices or in the Private Court for Tax Foreclosures (without prejudice to the criminal liability that may apply to the relevant case);
  • prior to the entry into force of the abovementioned decree, have entered into agreements with the social security authority for payment in instalments of the outstanding amounts of the debt (in these cases, the pardon of fines and the reduction of default interest only relates to the outstanding amounts).

The pardon for fines and the reduction in default interest is granted on the condition that taxpayers make full payment of the outstanding contributions that gave rise to the fine and default interest. In the event that the taxpayer:

  • makes payment in a single instalment, the taxpayer shall benefit from a total pardon of fines and a 98% reduction in default interest;
  • requests payment of the outstanding contributions in more than one instalment, the taxpayer shall benefit from a total pardon of fines and a 75% reduction in default interest.

The pardon of fines and reduction of default interest regime is in force for a period of 12 months, starting on 12 May 2021.

 

Are there any transitional social security measures to mitigate the impact of COVID-19?

Yes. Firstly, under Decree 23/2020, of 27 April 2020, local economic operators affected by the impact of the Covid-19 can benefit from the following facilities and incentives:

  • customs:

Economic operators will be granted an early exit authorization in connection with the import of products to prevent and treat COVID-19 until 31 December 2020. Imports must be regularized within 90 days.
Economic operators need to submit an affidavit of responsibility to the proper Customs Services to be able to enjoy this prerogative.

  • tax:
  1.  general release from the obligation to make payments on account in May, July and September 2020;
  2.  deferment of the special payment on account that should be made in July, August and October 2020 to January, February and March 2021; and
  3.  taxable persons holding VAT claims will be able to offset such claims against other tax liabilities charged by the Tax authorities until 31 December 2020.

In order to benefit from the facilities set out in paragraphs (1) and (2), taxable persons must:

(a) have had a turnover not exceeding MT 2,500,000.00 in 2019;

(b) have their tax affairs in order; and

(c) submit a duly reasoned application in accordance with the regulations that will be issued by the Minister for Finance.

Note that the payment of taxes on the import of food, medicines and other essential goods will be settled later, on terms to be defined;

 

 

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This information is being updated on a regular basis.

All information contained herein and all opinions expressed are of a general nature and are not intended to substitute recourse to expert legal advice for the resolution of real cases.